Question

Isobel was a professional accountant with a good credit rating, and for many years carried a...

Isobel was a professional accountant with a good credit rating, and for many years carried a credit card with a credit limit of $5,000. She never used the card, but when her daughter entered her final undergraduate year of education at a distant university, Isobel arranged for a supplementary card for her daughter to provide her with access to money for living expenses in addition to her paid tuition and residence fees. During her final year at university, Isobel’s daughter occasionally used the card, and from her own funds paid the full balance owing at the end of each month. On graduation, the daughter obtained employment with a large marketing corporation, where her work involved extensive travel. At times she used her credit card for non-business expenses while traveling. The amounts charged to the supplementary card were sometimes large, but each month the daughter paid the full balance owing. In view of the extensive use of the card, the credit card issuer gradually increased the credit limit until it reached $20,000. At the end of the daughter’s first year of employment, a corporate reorganization resulted in the elimination of her job, and she was terminated. At the same time, a dispute arose between Isobel and her daughter concerning the daughter’s association with a young man that Isobel characterized as a ‘no good’. As a result of the dispute, the two ceased to speak to each other. Isobel was unaware that her daughter had been terminated by her employer, and paid no attention to the large amounts charged to the daughter’s supplementary card over the next few months. However, at the end of the third month she was notified that both her credit card and her daughter’s credit card were cancelled, as her daughter had paid the account in the amount of $20,000 with a fraudulent cheque drawn upon a non existent bank account. When Isobel refused to pay the outstanding balance, the bank instituted legal proceedings against both Isobel and her daughter for the full $20,000. Discuss the arguments that might be raised by Isobel and the bank. Render a decision.

Homework Answers

Answer #1

The Bank would raise the argument on Isobel’s Daughter that she has paid the account with $20000 through a fraudulent Cheque of non-existing bank account. Also, Isobel will be asked and liable for legal action because she is the original account holder whose supplementary card has been arranged for her daughter. At such situation, Isobel cannot refuse the bank to pay the outstanding balance and is legally liable to pay the limit that is $20000 to the bank. Bank would argue that any one of them should have approached the bank and have mentioned about the job termination so that the card limit should have been reduced but no action from the side of Isobel and her daughter has now raised the problem. The Fraud Cheque is crime against which bank will take action and recover the penalty from Isobel and therefore it is better for Isobel to settle the matter by paying money to the bank.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Brandi just received her credit card bill, which has an outstanding balance equal to $3,310. After...
Brandi just received her credit card bill, which has an outstanding balance equal to $3,310. After reviewing her financial position, Brandi has concluded that she cannot pay the outstanding balance in full; rather, she has to make payments over time to repay the credit card bill. After thinking about it, Brandi decided to cut up her credit card. Now she wants to determine how long it will take to pay off the outstanding balance. The credit card carries an 18...
Jenny has a $5000 balance on her credit card that charges 18% interest, however, each month...
Jenny has a $5000 balance on her credit card that charges 18% interest, however, each month she gets her credit bill and there is an interest charge. Why is this happening? to get full credit for this question: Draw Timelines, Write the Correct Formula to be used and Solve the problem.
Choosing a Source of Credit: The Costs of Credit Alternatives Jamie Lee Jackson, age 27, full-time...
Choosing a Source of Credit: The Costs of Credit Alternatives Jamie Lee Jackson, age 27, full-time student and part-time bakery employee, is busy setting up her new home. Her budget is a little tight now as she made the decision to move in to a place of her own, which gives her privacy and independence, but all of the expenses are now her responsibility. Jamie Lee applied for three store credit cards when she was shopping for her furnishings. The...
Which of the following is true regarding setting personal debt limits? Can be more than one...
Which of the following is true regarding setting personal debt limits? Can be more than one answer. a. Your mortgage loan and all credit card charges, especially those paid in full every month, are included in the debt payments-to-disposable income method. b. The debt limit according to the continuous-debt method is a four-year payoff period. c. For most people, your debt limit should be lower than what creditors are willing to offer. d. Under the debt-to-income method, the recommended maximum...
Cate’s Cleaning Cate loves the look and smell of a clean house. Having been complimented so...
Cate’s Cleaning Cate loves the look and smell of a clean house. Having been complimented so frequently by visitors on the appearance of her home, she was finally convinced to make a business of it when a friend gave her $2,000 in July to clean his business for the next two months (August and September). The only stipulation was that Cate had to obtain liability insurance for any injury she might incur on his premises. Cate arranged the insurance to...
9. What can be taken off a credit report? A. Only Inaccurate items but not public...
9. What can be taken off a credit report? A. Only Inaccurate items but not public records B. Any inaccurate, incomplete, unverifiable accounts, old personal information and public records C. All information can come off at will D. Both A and B E. None above 10. How can one establish credit? A. Apply for a credit card B. Apply for a secured credit card C. Apply for a secured bank loan D. Become an authorized users in someone’s else credit...
1. Calculate the nominal annual cost of trade credit under each of the following terms. Assume...
1. Calculate the nominal annual cost of trade credit under each of the following terms. Assume a 365-day year. Do not round intermediate calculations. Round your answers to two decimal places. 1/15, net 25.   % 2/10, net 55.   % 3/10, net 45.   % 2/10, net 45.   % 2/15, net 40.   % 2. Dorothy Koehl recently leased space in the Southside Mall and opened a new business, Koehl's Doll Shop. Business has been good, but Koehl frequently runs out of cash....
Of the following people which would be classified as dependeds (child tax credit or qualifying relative)...
Of the following people which would be classified as dependeds (child tax credit or qualifying relative) Name and Social Security Number • Samson Roland Rockaway, SSN 123-45-6783, son of Lauren. Born November 13, 1999. Truck driver in Wilmington, NC prior to being laid off in October. Lauren provided none of his support. He lived in Wilmington for the entire year. His income consisted of wages of $32,000 and unemployment compensation of $3,000. • Jimmy Mullin Rockaway, SSN 123-45-6784, son of...
Post-Closing Trial Balance December 31, 2018 Debit Credit Cash      18,200 Accounts receivable        3,960 Supplies        1,380
Post-Closing Trial Balance December 31, 2018 Debit Credit Cash      18,200 Accounts receivable        3,960 Supplies        1,380 Prepaid insurance           750 Prepaid rent        3,800 Furniture        5,000 Accumulated depreciation, furniture           450 Equipment        8,000 Accumulated depreciation, equipment        4,000 Accounts payable        2,700 Accrued liabilities           190 Unearned service revenue        1,900 Common shares      20,000 Retained earnings      11,850 Total      41,090      41,090 PREPARE JOURNAL ENTRIES (+ADJUSTING ONES IF NEEDED) Business Activities for January, 2019 On January 4, 2019, Linda paid the outstanding accounts payable balance from December 31, 2018. On...
ou are a Consultant for the professional service firm, BUSI 2083 LLP. Your firm specializes in...
ou are a Consultant for the professional service firm, BUSI 2083 LLP. Your firm specializes in providing a wide variety of internal business solutions for different clients. One of the partners in your practice is impressed with the work you have completed to date and would like to give you additional responsibility. She has asked you to take the lead on this engagement with the hope that a successful outcome may lead to your promotion to Senior Consultant. You take...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT
Active Questions
  • Consider insertsort. Suppose that the input array A has 1% probability to be monotonically decreasing. Show...
    asked 3 minutes ago
  • Your company is thinking of introducing a Bring Your Own Device (BYOD) policy. You have been...
    asked 10 minutes ago
  • Attached is the file GeometricObject.java. Include this in your project, but do not change. Create a...
    asked 12 minutes ago
  • Suppose the number of cars in a household has a binomial distribution with parameters n =...
    asked 15 minutes ago
  • HR needs some information on the new interns put into a database. Given an id, email,...
    asked 36 minutes ago
  • Problem solving strategies Questions years = input("Enter a number of years and I'll tell you how...
    asked 40 minutes ago
  • Calculate ?Hrxn for the following reaction: CH4(g)+4Cl2(g)?CCl4(g)+4HCl(g) Use the following reactions and given ?H?s. C(s)+2H2(g)?CH4(g)?H=?74.6kJC(s)+2Cl2(g)?CCl4(g)?H=?95.7kJH2(g)+Cl2(g)?2HCl(g)?H=?184.6kJ Express...
    asked 47 minutes ago
  • ASCII (American Standard Code for Information Interchange) has an encoding for every character of the alphabet,...
    asked 1 hour ago
  • Is home confinement with electronic monitoring a deterrent? Are there negatives to being confined to one’s...
    asked 1 hour ago
  • Social hostility can have severe lasting effects of interperpersonal relationship during our adolescence years, which if...
    asked 1 hour ago
  • - A series RLC circuit has R=15 ?, L=1.5 H, and C=15 ?F. (a) For what...
    asked 1 hour ago
  • TV Circuit has 30 large-screen televisions in a warehouse in Erie and 60 large-screen televisions in...
    asked 1 hour ago